Appeals Court Mulls No-Call Challenge

A federal appeals court heard oral arguments this week at a hearing in Tulsa, OK, on the constitutional challenge to a national no-call list, and now industry and government await its answer on an issue that has been marked by topsy-turvy court rulings.

Whatever the ruling from the three-judge panel of the 10th Circuit Court of Appeals, observers expect the outcome to be appealed to the U.S. Supreme Court.

In the appeals hearing, the panel reviewed the consolidated case of the American Teleservices Association, the Direct Marketing Association and their private partners. Previously, the ATA and DMA had filed separate cases. The ATA's suit against the Federal Communications Commission, which has no-call rules parallel to the Federal Trade Commission, also was joined with the main lawsuit.

A final brief from the ATA and DMA is due Nov. 14, said Larry DeMille-Wagman, an attorney with the FTC's general counsel office. The appeals court has no deadline by which to make a decision, though in a ruling issued last month the court indicated a willingness to expedite the proceedings.

The timing of the decision is important because there is limited time for the current Supreme Court session, which began in October. By May, justices cease holding hearings and sit only to announce decisions. Conceivably, if the Supreme Court doesn't take up the case until the next session, a final resolution won't occur until 2005, DeMille-Wagman said.

The ATA has argued that the no-call list violates free speech rights and unfairly targets commercial telemarketing calls for regulation. The ATA's position is that political and nonprofit calls annoy consumers as well, and that applying no-call rules to commercial calls only is discriminatory.

In its written briefing to the appeals court, the FTC argued that there has been a public outcry about the rise in telemarketing call volume. The list is constitutional because it is not an outright ban on telemarketing but lets consumers make a choice about communications they receive at home, the FTC said.

The appeals panel also is reviewing the Competitive Telecommunications Association's challenge to the no-call exemption for existing-relationship calls. The association argued that the exemption lets telephone carriers maintain telemarketing contact with their customers but cuts off access to their competitors.

Federal judges in lower courts have overturned the national no-call list twice. In the first instance, a judge in Oklahoma City ruled that the FTC lacked congressional authority to launch a no-call list, but lawmakers moved to enact a law granting that authority just days after the decision.

Later, a Denver judge ruled that the no-call list is unconstitutional because it regulates commercial calls but exempts nonprofit and political calls. The appeals court stayed that ruling while it considers the case.

The no-call registry currently has 54.3 million phone numbers, according to the FTC.